THE day we had all been waiting for with a mix of doubts, hopes, and fears is finally here. The elections — anticipated in an environment of distrust and protest — are actually under way. Shall we rejoice? It may be wiser to wait until tomorrow evening, by which time we will know more about the process and outcome of the exercise.

The pessimist and the cynic among us may ask what good the elections are if they have been rigged. Before saying that a half-loaf is better than none, I should like to submit another consideration. Each one of the last five elections was allegedly rigged. Each time loud accusations and protests were voiced and, after the dust had settled, we learned to live with the results. Citizens, organs of civil society, even the opposition politicians, dealt with the ruling authorities that the rigged elections had put in place.

The preceding statement does not hold in one instance in our history. The elections of March 1977, rigged on a fairly large scale, were repudiated by a substantial segment of our population. There are widespread allegations that the present government has made laws and rules, and taken measures, that amount to “pre-poll rigging.” Government agencies are said to have given money to preferred parties and candidates. Provincial governors and other high-ranking public officials have reportedly gone out to pressure local notables to generate support for candidates of the regime’s choice.

Will ballot boxes be broken and stuffed, votes miscounted and misreported? Allegations that these malpractices have been committed will probably surface. One hopes that most of them will be unfounded. Western media, politicians, and governments are watching this election. Observers from the European Union, the Commonwealth, and SARC are present on the ground to inspect the actual process at polling stations. Our own hawk-eyed newsmen will do the same. I expect that all this domestic and foreign vigilance will act as a deterrent to blatant rigging.

We might as well live with the election results, as we have done before, if rigging has remained at a moderate level. One may regard it as moderate if it is about the same as it was in our five previous elections. But what if it is “massive”? It was considered massive in the 1977 elections. According to some PPP insiders, whom I interviewed a few years after the event, rigging (tampering with ballot boxes and other gross violations) had converted defeat into victory for their party’s candidates in about forty (out of 215) National Assembly constituencies. The PNA politicians at the time spoke of a considerably higher number.

If the results tomorrow appear to be incredible and, thus, strongly indicative of fraud on a large scale, what shall we do beyond feeling bad and sinking further down in the dark waters of despair? Should we expect the opposition politicians to start fomenting a revolt? Can a revolt against a military regime be viable?

The revolt against Ayub Khan succeeded because he had virtually no personal political standing to speak of, and the army chief (General Yahya Khan) would not deploy his troops to crush the revolt and keep the president in office. The revolt against Mr. Bhutto became formidable, because his charisma had faded, and his party had fallen into disarray, by the time the 1977 elections came along. Ziaul Haq visited terrible atrocities-imprisonment, torture, flogging, death -on countless persons suspected of being unfriendly to his rule, but no revolt against him developed.

It is most unlikely that a popular revolt against General Musharraf can be launched with even a modest chance of success. But one must ask also what would follow a successful revolt. The one against Ayub Khan opened the way for Yahya Khan’s military dictatorship, and that against Bhutto brought us General Ziaul Haq’s eleven years of unmitigated and disastrous tyranny.

It would be best to set aside thoughts of insurrection. Some observers may feel that, as an alternative, members of the next assembly, who do not belong to pro-government parties, should resign their seats, en bloc, as a gesture of protest. One is inclined to think that it would be more constructive if they stayed on and waged the fight against dictatorship from within the assembly.

Let us return, for a moment, to the issue of legitimacy. Many commentators have argued that the exclusion of Nawaz Sharif and Benazir Bhutto, each of whom commands considerable popular following, amounts to pre-poll rigging and makes the elections illegitimate. Most of them have not told us what, in their view, should have been done about the criminal cases against these dignitaries. Could the government have done anything other than arresting them on arrival in Pakistan (had they chosen to return), and taking them to the relevant courts for trial? Partisans of Ms. Bhutto and Mr. Sharif contend that the cases should have been withdrawn because they are bogus. But isn’t that something which, instead of being assumed, needs to be established in court according to the due process of law? A reasonable case can be made for the position that the exclusion of these politicians has not destroyed the legitimacy of the elections.

What if the voter turnout today is even lower than that in the 1977 election (which at 35.99 per cent of the eligible voters was the lowest in our electoral experience)? Low turnout could be interpreted to mean that the voters were disenchanted not only with the present regime, that conducted the elections, but also with the parties and candidates who were out in the field contesting them. It would then be wrong to single out General Musharraf and his government as the villains responsible for public apathy.

Assuming that we accept the election results, even if with reservations, let us give some thought to the likely developments that will follow. What is in store for us? According to some forecasters, we will have a “hung” parliament — so splintered that any coalition that adds up to a majority of the house, and thus becomes entitled to form the next government, will have to include a very large number of little groups and unaffiliated members.

Lacking internal cohesion, such a coalition will be exceedingly difficult to hold together, and the government it forms will be extremely fragile. Many of its members will demand huge prices for their continued support. In this train of reasoning, General Musharraf has been working for the emergence of precisely such a splintered assembly. For then the prime minister will have to look to him and the military establishment to keep his coalition partners in place. His dependence on the army chief, who is also the president, to ensure his own continuance in office will make him servile — as if the other disabilities imposed on him by the general’s constitutional amendments were not enough.

But the election may not go this way. Many of the independent candidates and parties, especially the ones that are newly formed and little known, may not win any seats at all. It has happened before, and it may happen again. For instance, Tehrik-i-Istaqlal — a known party headed until recently by Asghar Khan, a gentleman much respected and well regarded, hardly ever won a seat in the National Assembly. In some elections all of the Islamic parties, put together, failed to win more than half a dozen seats. If my remembrance is correct, they won only three in 1997.

I have thought all along that the PPP, PML(N) and PML(QA) will come out as major forces in the assembly, followed by MQM and ANP. If any two of the three major ones, together, formed a majority and took either ANP or MQM along for good measure, we could have a reasonably stable government. But which two? At first glance the PPP and PML (N), both opposed to the present military government, might appear as “natural” allies. But that may not remain the case once they start working together. Apart from sharing General Musharraf’s antipathy, they have never had any good feeling towards each other.

That brings us to the question of whether the general will tolerate a government that included either the PPP or PML(N). What could he do if they formed a coalition that was large enough to constitute a majority in the house? It would be difficult to find the grounds on which he could refuse to countenance it. On the other hand, it is entirely within the realm of possibility that he would accept it, if Raja Zafarul Haq or Makhdoom Amin Fahim, as the case might be, gave him the assurance that he would do nothing to rock the general’s boat, or make demands on behalf of his exiled party bosses.

Much depends also on how well PML(QA) does today. If its performance remains modest — winning, let us say, 60 out of more than 350 seats in the National Assembly — there is no way it can form the government without recruiting a large number of individuals and little groups. It would then be no more than a slightly senior partner in an unwieldy, and unstable, coalition put together with the military’s help. It is hard to visualize a coalition between the two PML factions, but one between PML(QA) and the PPP may work out, if the general can be persuaded to accept it, and he may well accept it — more readily if the PPP will concede the prime ministership to his nominee, presumably someone from within PML(QA).

Let us, for a moment, consider the possibility — howsoever remote — that the alleged rigging in favour of PML(QA) pays off and it captures, let us say, as many as 120 seats. In that event it will be the largest single group in the assembly, and it could easily gather a bit of external support, form a majority in the house, and (in consultation with General Musharraf) name a prime minister. He would prefer someone like Mian Azhar, reputed to be rather dull and slow, in that position. But even a more dynamic person, such as Chaudhry Shujaat Hussain, may be relied upon to accommodate himself to the general’s wishes and preferences.

There will be more to say after we have seen what tomorrow brings. But regardless of what it does, we must remember that reversing dictatorial trends in our society, and making democracy a part of our way of life, is going to be a long haul. It is a difficult but grand enterprise, and it calls for perseverance on our part. Hope we must keep; despair will not do.

The writer is professor emeritus of political science at the University of Massachusetts.

(E-mail syed.anwar@attbi.com)

ARE our political leaders less interested in the economic problems of their people and more interested in their political ploys with a few economic slogans? This is an age-old question in Pakistan.

This issue has come to the fore again before the general elections when there has been more focus in the country on the poverty alleviation than before, as the World Bank, Asian Development Bank and the IMF are highlighting it and offering far more assistance. To begin with, are the political leaders knowledgeable about modern economics, including development economics and the economics of poverty? Are they aware of the implications of the increasingly globalised economy, with national economic barriers eroding all around and global economic competition increasingly fearsomely?

What most of them talk about usually is a kind of welfare economics or promising more to the people, like the PPP’s Roti, Kapra aur Makan, with its variations re-echoed by other parties. Most of the leaders have not studied economics, and some like Ms Benazir Bhutto, who had for a while, are letting their political preoccupations over-ride that. Even when they know some economics they do not know the complexities of modern economics. And they are under no compulsion most of the time to give top priority to the economy for a variety of reasons.

The basic question is whether there is the political will in them to implement their economic programme if they have one and give credence to their economic slogans? That is lacking even if they are not feudal lords or tribal chiefs with their limited outlook. Some of the leaders have their captive followers. They could be leaders of sectarian groups, rigid castes, or ethnic groups, or voting for some of these leaders may follow a traditional pattern, or the leaders may be rich enough to buy the chiefs of such sub-groups in each locality.

It has been said that China became a truly socialist country because of Mao Zedong’s emotional commitment to it, while India could not become a socialist country as Jawarharlal’s commitment to socialism was intellectual. It was more like Fabian socialism. A leader needs stronger commitment to achieve greater things in the face of severe opposition. What Pakistan leaders lack is that kind of a strong commitment to fight poverty.

Zulfikar Ali Bhutto had an inner compulsion to fight poverty. In 1971 he took me to a dinner at the house of Kasem Patel, who later became a provincial minister. He was joined there by Khalid Bin Sayeed, author of several excellent books on Pakistan. He had come from Canada. He asked Bhutto why should a person born with a silver spoon in his mouth be so much concerned about poverty. Bhutto said “that is because my mother was poor.” A tear dropped from his eyes. If he could not do more to fight poverty while in office that was because of his political preoccupations, although the Simla Pact gave him a reprieve from Kashmir.

Many of the party leaders are not interested in the economic problems of their people as they are rich, particularly leaders of major parties, like PPP and PML of several shades. And if some of the leaders are not rich, they certainly become resourceful in the process of leading their parties. Altaf Hussain, who can command his party from London, is an example of such resourcefulness.

If the elections in the country are held regularly the voters can force the leaders to take steps to reduce poverty. But elections in Pakistan are irregular, and too often there are new parties and new faces. And quite often money plays a large role in deciding who wins or who gets more votes.

The rich groups in the country are more organized and vocal. the Federation of Chambers of Commerce and Industry, and the various provincial chambers are vocal in voicing their demands for concessions and privileges. So are associations like the All Pakistan Textile Mills Association, the rice and cotton exporters associations. The voice of the exporters is often heard with due concern by the government.

Compared to them the voice of the trade unions is weak. They are strong mostly in the organized sector, particularly foreign companies and public sector units. They are not concerned with the unemployed workers or new job-seekers. They don’t have their own inflation figures to challenge the official inflation figures.

In Germany the inflation figures and other economic indicators are settled largely by the four or five major economic institutes in centres like Berlin, Munich, Hamburg and Keil. They are funded by the government but are independent. Some of them disagree with each other on policy issues as well.

We need such independent institutes in Pakistan whose figures are credible. The Social Policy and Development Centre in Karachi established by Dr Hafiz Pasha is one such centre. We need far more like them. The Pakistan Institute of Development Economics is Islamabad could play a far larger and truly national role if it was not so much of an official institution.

There is a valid complaint in the country today that the manifestoes of political parties are barren. They had to be so, when there are far too many parties in the country. And until recently the parties were not sure if the elections would be held in October. When the parties are too many they cannot come up with credible policies which then can be implemented to a large extent after they are elected. And if the parties permitted to contest are as many as 92, inclusive of 12 kinds of Pakistan Muslim League neither can their manifestoes be formulated earnestly nor believed by the voters seriously.

Even Ms Benazir Bhutto did not win a simple majority of the seats in the National Assembly both times she became prime minister in 1988 and 1993. Hers was the largest single party on both occasions. Even now her hope is she would win 40 to 42 per cent of the seats in the National Assembly, while others estimate a 30 per cent win for PPPP.

As a result, such large parties have to enter into coalition with other parties which means compromising on the programme to be implemented.

The same is happening in India where Atal Behari Vajpayee heads a 22-party coalition. Though committed to the economic reforms initiated by the Congress government in 1991 he is not able to implement most of them. Hence foreign investment has been very low and the economic growth far below the 7 or 8 per cent projected earlier.

At a recent seminar in Islamabad in which former finance minister Sartaj Aziz had participated, the politicians were accused of not showing enough interest in economic development, particularly poverty alleviation. But he recalled the country had achieved an economic growth of 6 per cent during 1960 to 1995, and much of the time the politicians were in office. Since then the growth had come down to 3 to 4 per cent.

He said the emphasis of the military government was not so much on poverty alleviation or attending to the basic causes of poverty but on macro-economic stabilization. He said it was the Nawaz Sharif government which had come up with Baitul Maal and Tameer-e-Waatan Programme, and the Social Action Programme in 1992 to fight poverty and eradicate its basic causes.

There is a variety of reasons why poverty alleviation is receiving increasing attention in Pakistan now. To begin with it is a world phenomenon. Chiefs of donor organizations like James Wolfensohn of the World Bank and others have been giving increasing attention to that. He has gone around the world and met some of the very poor and got the agonising voices of others recorded. The three-year IMF package for Pakistan is called the Poverty Reduction and Growth Facility. And the Asian Development Bank has come up with a poverty alleviation programme along with 2.4 billion dollars which can be increased if we do well in the educational and health sectors.

After over 50 years of the World Bank and IMF one-fifth of the world’s population is grovelling in abject poverty and they have to think of radical measures with a sense of urgency instead of relying on absurd theories like the trickle-down theory.

The question is: how will the newly elected leaders combat the problem of poverty and reduce the number of the unemployed and those killing themselves for want of jobs or too long?

Of course, that problem cannot be solved at the official level alone. Downsizing of the government and reducing the vast expenditure on the bureaucracy have been postponed for fear of increase in the unemployment in the country. The unemployment has to be fought through private sector investment along with official poverty alleviation measures.

“I KNOW how it feels to be an outsider,” says Senator Bob Torricelli of New Jersey. In the days after 9/11, he specially came to our Islamic Centre to show solidarity with his Muslim constituents and said, “My father was Italian and mother German, both immigrants. Growing up, I remember the racial slurs we faced — everybody on our street threw their garbage in front of our home.”

Last week, Torricelli with tears and emotion announced that he will not run for November 5 elections to the US Senate.

He was elected to Congress at age 31 and has since served seven terms. What makes him sever the 20- year ties?

Simply put, people power.

Recent pre-election polls reflected Torricelli trailing behind his Republican opponent, because of the overwhelming evidence come to light about his financial misdemeanour in accepting $150,000 from a Korean-American businessman in return for helping him win contracts.

Two institutions deserve credit for exposing corruption: The United States judiciary and the media.

While his congressional colleagues sitting on judgment over him in the Ethics Committee, some months ago, severely reprimanded him, the judiciary went a step further and allowed details of the dirty deal to be made public. The media then went into overdrive and exposed the Senator’s fiscal guilt. He had to withdraw.

American voters don’t easily forget nor forgive corruption.

Today, millions of Pakistani voters will exercise their right to choose. Unspectacular is the list of candidates before them. Constitutional tinkering, legal wrangling, horse-trading and loyalty swapping have left the electorate awash in confusion, if not eternally disillusioned.

While the pugnacious Pakistani press has made incursions into the political malfeasance that has afflicted the democratic process through its intrusive journeys entering the realm of investigative journalism versus political advocacy, the press has entirely not been successful in swaying public opinion one way or the other. Nor has it managed to defeat the Establishment’s “imposed silence and normalized quiet of power,” as Edward Said puts it.

Low as our literacy rate is, throngs of voters today will stand in line to vote not for change, but for the same leaders who have fought too many elections, won and re-kindled their own pelf and power while spiking the dreams of thousands for a better tomorrow.

The judicial process too has egregiously left the voters in the lurch. Instead of providing clarity and vision through its sphere of influence, it has muddied the political scenario and dawdled into legal minutiae that has made many forever to lose hope for a just civil order.

The soulless elections have begotten an uncaring mindset from the intellectual and educated strata of Pakistani citizenry — uninvolved and detached from developments occurring right under their nose: of chameleons and slimy geckos shamelessly changing their loyalties or some parties themselves being morphed into one-night stands. Others have hobbled together gauche startups overnight. Pulled out from the current political flotsam and joined under the ‘crescent’ party symbol, the only commonality among its disparate heavyweights is a win-win situation grounded in their family connections and plenty of financial resources.

Not many election-watchers can seriously have conducted hair splitting exercises, challenging or debating (publicly or privately) the scores of party manifestos. Only because most of it is old hat plus plenty of hot air. Over time, manifestos are only worth the paper they are printed on.

Men (that includes women), not manifestos, matter in the end.

Pakistan’s elections are a non-issue for the news hungry media here. Ms Bhutto has come and gone without causing waves. The Wall Street Journal carried a small item in its front page World Briefing section: “A Pakistani court adjourned until November a hearing on ex-Premier Bhutto’s petition to be allowed to run in next week’s elections, effectively foreclosing her plan to return.” Several months ago, announcing in New York, Benazir said she would return triumphantly to Pakistan for the elections and accompanying her would be the cream of American media.

With General Musharraf having beaten her in the race for recognition by the Bush administration and the US media, Ms Bhutto made a valiant attempt at a comeback on Fox TV, claiming: “I believe that September 2001 would not have taken place when I was prime minister. The two attacks on the World Trade Centre, the two attacks on the two US embassies in Africa, and the Cole ship in Yemen all took place when my party and I were in opposition.”

She desperately tried to convince the Americans that Musharraf is in sync with terrorists and that he ‘feared’ her return because “I stopped the Taliban from taking over Afghanistan. Until my government was overthrown, the Taliban were unable to break off talks with the UN. After my overthrow, they invited in Osama. And he set up Al Qaeda. So I think they (Musharraf) do fear my return.”

She also admitted to a low-level ‘contact’ with the White House and State Department, “Of course, I’d like high-level contact, but for the time being, that’s the contact I have.”

The blustery Bush administration’s rapid-fire decisions have resulted in literally underwriting the presidency of General Musharraf and handing him a solid endorsement just two weeks before the elections. George W. Bush has said the US and Pakistan “stand shoulder-to-shoulder, working to eliminate international terrorism”. Exactly the opposite of Ms Bhutto’s lamentations during her recent trip to the US.

While she urged “Washington should not patronize dictators”, Bush has responded by pledging Musharraf $1 billion in debt write-off.

Praising Islamabad as “a vital and stalwart friend and a key partner for the United States,” Bush says his government is “marshalling hundreds of millions of dollars” in additional resources and expertise to assist Pakistan in training teachers, modernizing curriculums and providing more health-care services to its most needy citizens.

In the present Pakistan-US trajectory, Pentagon has provided yet more for Pakistanis to chew on: a ringing support saying: “We have an interest in working together with Pakistan’s armed forces to address Pakistan’s security concerns and help enhance its conventional defence capabilities.”

Timing is the key. It so happens that Musharraf was around at the right time and at the right place when Al Qaeda struck. Today, many western leaders, including newly-elected German Chancellor Schroeder, will give their right arm to be ‘tight’ with Bush as Musharraf is.

anjumniazusa@yahoo.com

THE military regime of General Pervez Musharraf is about to complete its three years in power. A review of its economic performance is thus in order. All military regimes in Pakistan have justified their takeover on the grounds of mismanagement by the erstwhile political governments.

And, of course, all such regimes have begun by promising to introduce their proverbial military efficiency to improve matters in the civilian domain. The fourth military regime of General Pervez Musharraf is no different. Two claims of the regime are noteworthy: accountability for corruption and economic recovery.

At the very outset, the Musharraf regime assumed that corruption was the basic cause of the country’s economic woes and vowed to recover “looted wealth”. It launched a concerted campaign against bank loan defaulters. By and large, the campaign was a failure and less than 15 per cent of defaulted loans are said to have been recovered. Not surprisingly, the campaign that commenced with so much hype was quietly abandoned and ceased to figure in the media. It is noteworthy that the loan recovery programme was restricted to loans contracted after 1985, thus, exempting all those who had obtained loans under General Zia-ul-Haq’s military regime prior to the partial sharing of power with pro-military politicians.

The low recovery rate could be attributed to the possible fact that the bulk of the loans were extended prior to 1985. Worse still, the current military regime is again guilty of expanding the size of defaulted loans. This is evident from the fact that the principal amount of non-performing loans actually increased from Rs. 186 billion as of June 30, 2001, to Rs. 198 billion as of June 30, 2002.

Unfortunately, the military regime’s corruption-free image so refreshingly maintained over nearly three years has begun to be tainted. Reports have surfaced about the hundreds of million rupees worth of financial misdeeds of a former ISI chief. Other reports speak of over one hundred senior military officers, including General Musharraf himself and certain military members of his cabinet, allotting to themselves agricultural plots of up to 400 acres each at a nominal price of Rs. 380 per acre.

In both the cases, sufficient details have become available to give the reports an element of credence and, in the latter case, chak and plot numbers have also been published. Official denials have not been forthcoming either.

On the economic front, the regime commenced with a revenue deficit of 2.7 per cent of GDP, a budget deficit-GDP ratio of 6.1 per cent, current account deficit-GDP ratio of 3.9 and foreign exchange reserves of $ 1.6 billion. By the end of fiscal year 2002, it had brought down the revenue deficit to 2.1 per cent of GDP and the primary budget deficit-GDP ratio to 5.5 per cent. More remarkable was the conversion of the current account-GDP deficit into a respectable surplus and the accumulation of foreign exchange reserves of over seven billion dollars. These are notable successes.

Incidentally, all these achievements fall in the realm of stabilization policy. Not surprisingly, international financial institutions are ecstatic. Pats on the back of the military regime by these organizations are thus understandable. Unfortunately, however, the international finance agenda appears to have been achieved at the heavy cost of the agenda of the people, particularly the poor.

This can be discerned form the fact that similar progress has not been achieved on the economic recovery front; as promised by General Musharraf following his takeover. On the contrary, the situation has worsened. Rates of Gross Fixed Capital Formation have consistently declined from five per cent in 2000 to less than one per cent in 2001 and actually turned negative 3.1 per cent in 2002.

Average GDP growth during the three years, 2000-2002 has been a low 3.3 per cent, with average per capita GDP growth at less than one per cent. The cost to the people, particularly the poor, has been heavy, with 350,000 people having been rendered unemployed and seven million people having been pushed below the poverty line over the first two years of the regime. The rate of growth in poverty over so short a time constitutes an uncomplimentary record of the military regime.

The deterioration in growth, investment, employment and poverty is not accidental. Rather, a purview of how the stabilization objectives of reduction in budget deficit, current account deficit and inflation have been achieved exposes the military regime’s direct responsibility for the decline. To begin with, contrary to the expectation of military efficiency, fiscal performance has been rather poor.

Tax collections have been plagued by under-achievement of targets, even after they are revised downwards and current expenditure has continued to be overrun. The resulting deficit has been managed by reductions in development expenditure, which was cut by a record 60 per cent in 2001. In fact, the burden of achieving the committed budget deficit target has largely been borne by development expenditure.

Factors contributing to lower inflation are also disturbing. A question that has been frequently raised in Pakistan has been why is the inflation rate is high. Ironically, the relevant question today is why the inflation rate now so low and what impact it has on the poor?

Generally, a lower rate of price increases should be beneficial for the poor, as it protects their real incomes. The fact that this has not been the case merits some explanation. Prices are determined by the combination of supply and demand factors. On the supply side, an escalation of production costs is likely to lower output and exert an upward pressure on prices. On the demand side, a contractionary monetary and fiscal policy is likely to curtail purchasing power, weaken market demand and exert a downward pressure on prices.

The situation in Pakistan during the last two and a half years has been as follows. The contractionary monetary and fiscal policies, represented by sharply lower growth in money supply and sharp cuts in public investment, have tended to impact purchasing power negatively. The fall in purchasing power has reduced the demand-pull element in inflation to zero, leading to lower price increases. At the same time, enhancements in domestic taxes and utility and gasoline prices as well as accelerated depreciation of the rupee, have raised production costs.

The principal element in poverty growth appears to be unemployment-related, given that the virtual collapse of investment has closed avenues for employment generation. An indication of the collapse of investment can be seen in recent trends in private sector gross fixed capital formation in commodity producing sectors. Between 1995 and 2001 private investment in agriculture and large-scale manufacturing has fallen by between 15 to 20 per cent, while it has been reduced by half in a labour-intensive sector like construction. The slowdown in large-scale manufacturing has caused labour utilization to drop and impacted on downstream small-scale industries as well.

There has been large-scale retrenchment of government and semi-government employees, and service sector organizations, including foreign banks, have laid-off staff. Unemployment tends to take away income altogether. Low inflation is of little benefit to households that no longer command the same income and cannot be expected to be pleased with the fact that the average price line is stable. Ironically, far from low inflation benefiting the poor, it is growth in poverty itself that is responsible for low inflation.

An important question arises as to why pro-poor policy options were not chosen in order to achieve given macroeconomic objectives. All decisions are based on the explicit or implicit calculus of costs and benefits. Decisions are made in favour of those options where benefits exceed costs. However, there are many occasions where those who stand to benefit from an option are different from those who are likely to bear the costs of that option. If those in authority are likely to be beneficiaries, a favourable decision is likely; if they are likely to bear the costs, the option is not likely to be chosen.

That the policy makers of the military regime opted for harsh stabilization policies is thus understandable. The benefits from posting success on the stabilization scoreboard have been many for the regime. The most important benefit has come in the form of relaxation of resource constraint on account of the rather liberal debt rescheduling and fresh lending.

Not infrequently, unrepresentative regimes do tend to opt for options in which the costs to the unrepresented poor fail to be taken into account. General Musharraf’s regime has been no different. The insensitivity of the regime to policy impacts on the poor can be discerned many counts, the most significant being the slapping of sales tax on medicines. That the tax measure has now been withdrawn must be credited to the fact the elections are approaching and the poor, who have borne the costs, are about to vote on the future of the regime.

Unfortunately, the ushering in of an elected government is not likely to give the poor the leverage for introducing pro-poor policies. The outgoing military regime has put in measures to tie up the succeeding elected government into the web of a policy framework whose beneficiaries will continue to be international and domestic capital and whose costs will continue to be borne by the poor.

(Concluded)